Specifically, we aim to address the following impact themes:
Bearing in mind our mission, there is also the explicit target to generate a market rate financial return.
The Kempen Global Impact Pool (GIP) achieved a strong return of 10.7% for the FA share class during the fourth quarter and a return of 18.3% for 2021. With this last quarter of the year, the GIP completed a four year track record with an annualized return of 4.2% since inception.
The GIP continued its good performance from the previous quarter, as the fourth quarter of 2021 recorded the GIP’s best return since its inception in 2018. The GIP’s private markets investments were the largest contributors to this performance, a result of a more fully invested portfolio and portfolio companies starting to reflect their underlying potential. Detailed performance information is presented below. The GIP investment team is confident that the current portfolio is well positioned to marry impactful investments with solid financial returns.
The GIP continued its mission to pool capital and scale impact on behalf of its participants during the last quarter of 2021. Assets under management grew to €147 million at the end of 2021, the increase of 17 million over the quarter can be attributed to inflows and valuation uplifts across the GIP portfolio. The GIP management team developed a very promising pipeline of new investments and has been able to commit a significant amount of capital in the second half of 2021. In the fourth quarter the GIP also committed new capital to its investment partner focusing on investments in sustainable infrastructure, increasing its exposure to the energy transition impact theme. Finally, in the fourth quarter of 2021, the Pool committed capital to an Indian asset manager, specializing in reducing the financial inclusion gap in India through the provision of loans to underserved households or SME’s.
The overview below provides a brief summary of the most important developments in the portfolio this quarter per Impact theme.
One of the GIP's investment partners within the Circular economy theme focuses on providing working capital to smallholder farmers in developing countries. While investments from this partner were challenged during the pandemic, with severe disruption in the agricultural supply chain, most headwinds are starting to fade. This bodes well for the disbursement of loans and thus the impact targeted with this partner. In 2021, $90 million of impactful loans were disbursed, with several new entities being added to the list of investees.
With its investments within the Climate and energy transition theme, the GIP contributes to the transition to more sustainable energy sources. During the quarter, one of the investment partners of the GIP exposed to this theme again made good progress with the development of wind farms and solar energy parks. This will add a significant amount of sustainable capacity to the energy network for the foreseeable future. The impact case on the following page covers the onshore project Ciekocinko, which became operational in 2021. Furthermore, capital was drawn for a new partnership with one of the existing investment partners within this theme. The investments within this new partnership will increase the exposure of the GIP towards the Climate and Energy theme by making investments in European wind farms and solar power plants.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested. Past performance provides no guarantee for the future.